I came across this little gem while searching for a client. I am a huge fan of Craftsman style homes. I love their elegance and attention to detail. Ideally if I can the fund I would go victorian but realistically a Craftsman is more in my immediate means. Click on the link below to check out these pictures there insane. This home have been kept in amazing condition.
The seller is a 5th generation San Diegan, whose respect for the heritage of t
7) The Kitchen
If the kitchen is the heart of your home, don’t settle for a home with a kitchen that just won’t work. You can always remodel, but it’s very costly. Can you just replace cabinet faces and countertops? Will an inexpensive makeover be sufficient? Don’t worry about appliances, as they can usually be easily replaced.
Get lots of information about Kitchens here.
Closets and Storage
Older homes tend to have little closets and not a lot of storage space. If you have lots of sports equipment, craft supplies, out-of-season clothes, and holiday decorations, be sure you know where it will go in your new home. Newer homes tend to have big closets and lots of storage. You can always add storage space, but you might have to sacrifice living space in your rooms.
Read here about Closet Design
9) Windows and Lighting
Do you love a bright sunny room or do you love privacy? Look at a home with light and sunshine in mind. Look at the locations of electrical outlets and fixtures. Will they accommodate your lighting needs? Is there recessed lighting in the kitchen, cove lighting in the family room and a lovely chandelier in the dining room? If not, you can add them later, but it’s nice to have it in place when you move in.
Find out more about using Lighting in decorating.
10) Finishing Touches
Sometimes the simplest home looks spectacular because of the installation of moldings, hardware and a fireplace. If these elements are important to you, look for them while house hunting or be ready to add them after you move in.
Get more information about Moldings, Fireplaces, and Hardware.
If you keep these specific elements of a home in mind, your house hunting will be more successful, and you’ll likely end up with the home of your dreams — for now, that is!
A FHA insured loan is a Federal Housing Administration mortgage insurance backed mortgage loan which is provided by a FHA-approved lender. FHA insured loans are a type of federal assistance and have historically allowed lower income Americans to borrow money for the purchase of a home that they would not otherwise be able to afford. To obtain mortgage insurance from the Federal Housing Administration, a mortgage insurance premium (MIP) equal to a percentage of the loan amount at closing is required, and is normally financed by the lender and paid to FHA on the borrower’s behalf. Depending on the loan-to-value ratio, there may be a monthly premium as well.
The program originated during the Great Depression of the 1930s, when the rates of foreclosures and defaults rose sharply, and the program was intended to provide lenders with sufficient insurance. Some FHA programs were subsidized by the government, but the goal was to make it self-supporting, based on insurance premiums paid by borrowers. Over time, private mortgage insurance (PMI) companies came into play, and now FHA primarily serves people who cannot afford a conventional down payment or otherwise do not qualify for PMI.
The National Housing Act of 1934 created the Federal Housing Administration (FHA), which was established primarily to increase home construction, reduce unemployment, and operate various loan insurance programs.[1] The FHA makes no loans, nor does it plan or build houses. As in the Veterans Administration’s VA loan program, the applicant for the loan must make arrangements with a lending institution. This financial organization then may ask if the borrower wants FHA insurance on the loan or may insist that the borrower apply for it. The federal government, through the Federal Housing Administration, investigates the applicant and, having decided that the risk is favorable, insures the lending institution against loss of principal in case the borrower fails to meet the terms and conditions of the mortgage. The borrower, who pays an insurance premium of one half of 1 percent on declining balances for the lender’s protection, receives two benefits: a careful appraisal by an FHA inspector and a lower interest rate on the mortgage than the lender might have offered without the protection.
Until the latter half of the 1960s, the Federal Housing Administration served mainly as an insuring agency for loans made by private lenders. However, in recent years this role has been expanded as the agency became the administrator of interest rate subsidy and rent supplement programs. Important subsidy programs such as the Civil Rights Act of 1968 were established by the United States Department of Housing and Urban Development.
In 1974 the Housing and Community Development Act was passed. Its provisions significantly altered federal involvement in a wide range of housing and community development activities. The new law made a variety of changes in FHA activities, although it did not involve (as had been proposed) a complete rewriting and consolidation of the National Housing Act. It did, however, include provisions relating to the lending and investment powers of federal savings and loan associations, the real estate lending authority of national banks, and the lending and depositary authority of federal credit unions.
Further changes occurred in the 1977 Housing and Community Development Act, which raised ceilings on single-family loan amounts for savings and loan association lending, federal agency purchases, FHA insurance, and security for Federal Home Loan Bank advances. In 1980 the Housing and Community Development Act was passed; it permitted negotiated interest rates on certain FHA loans and created a new FHA rental subsidy program for middle-income families.
On August 31, 2007, the FHA added a new refinancing program called FHA-Secure to help borrowers hurt by the 2007 subprime mortgage financial crisis.
On March 6, 2008, the “FHA Forward” program was initiated. This is the part of the stimulus package that President George W. Bush had in place to raise the loan limits for FHA.
Second, the potential lender assesses the prospective home buyer for risk. The analysis of one’s debt to income ratio enables the buyer to know what type of home can be afforded based on monthly income and expenses and is one risk metric considered by the lender. Other factors, e.g. payment history on other debts, are considered and used to make decisions regarding eligibility and terms for a loan.FHA does not make loans. Rather, it insures loans made by private lenders. The first step in obtaining an FHA loan is to contact several lenders and/or mortgage brokers and ask them if they originate FHA loans. As each lender sets its own rates and terms, comparison shopping is important in this market.
Section 251 insures home purchase or refinancing loans with interest rates that may increase or decrease over time, which enables consumers to purchase or refinance their home at a lower initial interest rate.
FHA’s mortgage insurance programs help low- and moderate-income families become homeowners by lowering some of the costs of their mortgage loans. FHA mortgage insurance also encourages lenders to make loans to otherwise credit-worthy borrowers and projects that might not be able to meet conventional underwriting requirements, protecting the lender against loan default on mortgages for properties that meet certain minimum requirements, including manufactured homes, single and multifamily properties, and some health-related facilities. The basic FHA mortgage insurance program is Mortgage Insurance for One-to-Four-Family Homes.
FHA allows first time homebuyers to put down as little as 3.5% and receive up to 6% towards closing costs. Specific FHA lender overlays may be tighter. For example very few lenders will allow a seller to contribute more than 3% toward allowable closing costs. If little or no credit exists for the applicants, the FHA will allow a blood relative, such as a parent, to co-sign for the loan without requiring them to reside in home with first time homebuyer. This is called a Non-Owner-Occupied Co-Borrower. Depending on the state you reside in, you may receive a discount on your State Transfer Taxes at settlement. Again, the specific FHA lender’s underwriting guidelines will have their own standards. Very few lenders will fund FHA loans for buyers without a minimum 620 FICO score. For below 620 FICO scores, interest rates will be higher.
Down payment assistance and community redevelopment programs offer affordable housing opportunities to first-time homebuyers, low- and moderate-income individuals, and families who wish to achieve homeownership. Grant types include seller funded programs, the Grant America Program and others, as well as programs that are funded by the federal government, such as the American Dream Down Payment Initiative, or local governments, often using mortgage revenue bond funds.
(note: Video used for informational purposes only. This in no way is promoting this video’s services)
On May 27, 2006, the IRS issued Revenue Ruling 2006-27, categorizing the non-profit seller funded down payment assistance programs (DPA programs) as “scams.” The IRS ruled that organizations such as AmeriDream and Partners in Charity are no longer eligible for non-profit status and are not acting as “charitable organizations” as defined by the IRS. This ruling was based largely on the circular nature of the cash flows, in which the seller pays the charity a “fee” after closing. Many believe that the “grant” is really being rolled into the price of the home. According to the Government Accountability Office, there are higher default and foreclosure rates for these mortgages.
On October 31, 2007, the Department of Housing and Urban Development adopted new regulations to ban so-called “seller-funded” down payment programs. The new regulations state that all organizations providing down payment assistance reimbursed by the property seller “before, during, or after” that sale must cease providing grants on FHA loans by October 30, 2007, with the exception of the Nehemiah Corporation. Nehemiah is the beneficiary of a lawsuit settlement with Department of Housing and Urban Development in April 1998. The terms of that settlement will allow Nehemiah to operate until April 1, 2008. Ameridream was granted an extension to the new regulations until February 29, 2008.
Several similarly operated government grant programs were introduced in response to the IRS Revenue Ruling in May 2006. Their governmental status made them exempt from the IRS Ruling, but they are still affected by the HUD Rule Change. One such organization was The Grant America Program, which was conducted by the Penobscot Indian Nation and had been available to all homebuyers in all fifty states.
From Signonsandiego.com
When seeing the exterior of artist Doug Kipperman’s 1917 bungalow in South Park, no one would guess the eco-friendly house to be a century old.
The inviting front porch, stained-glass pieces, well-furnished gumwood paneling and beautiful country-style backyard could be deceiving. However, the importance of sustaining the environment and its people is what led Kipperman to improve the old home.
After stumbling across its sale in 2004, Kipperman and his wife immediately fell in love with the original craftsmanship and felt the need to bring the charming details of the house back to life. Patience with the long renovating process has given him and his family a beautiful space to call home sweet home.
To find inspiration for your living space, view this sustainable house along with four other homes showcased at this year’s Old House Fair, now in its 13th year and presented by the South Park Business Group and the Greater Golden Hill Community Development Corp.
Q: How long did it take to refurbish the house?
A: The physical building took about seven to eight months, but the property is evolving. The gardening took a little over a year, but the overall yard took about over three years. It’s been on a project-by-project basis. Our next project is a “living wall” on the backyard deck. It will be a tapestry with real plants and backlit stained glass. However, we’re calling it an “eternal wall,” because my attitude is to make sure it lasts for the rest of my life.
Q: What led you to want to renovate the house?
A: The place was a diaster. It was neglected for a lot of years, but we just fell in love with the craftsmanship. We sat for six hours talking to the owner. There was this warmth, beauty and craftsmanship about the house that we don’t see anymore. Nowadays, we are in such a hurry we forget about before. We wanted to maintain the spirit of the craftsmanship, but put in our own personality.
Q: What was the most challenging aspect when fixing the house?
A: To make it safe. To make it a healthy environment. The construction and materials that are sustainable were not readily available, so it was hard, but it was important to make it safe. And accessible.
Q: Any advice for people who are interested in repairing their old homes?
A: Be patient and have deep pockets. Make sure people you work with know what you want. We’ve been blessed with the people we’ve worked with. Know the repertoire of the contractor. I talked to customers of contractors to know how they worked.
Q: Why did you feel it is important to show your house at the Old House Fair?
A: Pride. We’re proud of our house. As an artist, I look at a lot of different things, and I like to put my own signature on it. I look at everything and inspire to create my own art. Hopefully this will inspire others.
When seeing the exterior of artist Doug Kipperman’s 1917 bungalow in South Park, no one would guess the eco-friendly house to be a century old.
The inviting front porch, stained-glass pieces, well-furnished gumwood paneling and beautiful country-style backyard could be deceiving. However, the importance of sustaining the environment and its people is what led Kipperman to improve the old home.
After stumbling across its sale in 2004, Kipperman and his wife immediately fell in love with the original craftsmanship and felt the need to bring the charming details of the house back to life. Patience with the long renovating process has given him and his family a beautiful space to call home sweet home.
To find inspiration for your living space, view this sustainable house along with four other homes showcased at this year’s Old House Fair.
Q: How long did it take to refurbish the house?
A: The physical building took about seven to eight months, but the property is evolving. The gardening took a little over a year, but the overall yard took about over three years. It’s been on a project-by-project basis. Our next project is a “living wall” on the backyard deck. It will be a tapestry with real plants and backlit stained glass. However, we’re calling it an “eternal wall,” because my attitude is to make sure it lasts for the rest of my life.
Q: What led you to want to renovate the house?
A: The place was a disaster. It was neglected for a lot of years, but we just fell in love with the craftsmanship. We sat for six hours talking to the owner. There was this warmth, beauty and craftsmanship about the house that we don’t see anymore. Nowadays, we are in such a hurry we forget about before. We wanted to maintain the spirit of the craftsmanship, but put in our own personality.
Q: What was the most challenging aspect when fixing the house?
A: To make it safe. To make it a healthy environment. The construction and materials that are sustainable were not readily available, so it was hard, but it was important to make it safe. And accessible.
Q: Any advice for people who are interested in repairing their old homes?
A: Be patient and have deep pockets. Make sure people you work with know what you want. We’ve been blessed with the people we’ve worked with. Know the repertoire of the contractor. I talked to customers of contractors to know how they worked.
Q: Why did you feel it is important to show your house at the Old House Fair?
A: Pride. We’re proud of our house. As an artist, I look at a lot of different things, and I like to put my own signature on it. I look at everything and inspire to create my own art. Hopefully this will inspire others.
From San Diego Union Tribune
Home prices and sales in San Diego County fell in May from one year ago, following the same downward trend seen throughout Southern California, which remained in record-low sales territory last month.
Numbers from DataQuick Information Systems show May’s median price for all sales in San Diego was $324,500, down 4.6 percent from last year but up 0.9 percent from April. Sales fell 20.4 percent in May from a year ago to 3,087 and dropped 5.8 percent from April.
Looking at the six major counties in Southern California, prices remained at their three-year low and prices continued to slide year-over-year for the 11th straight month, DataQuick researchers said.
San Diego County had the steepest year-over-year sales drop among the six counties in the company’s monthly analysis. Los Angeles, Orange and San Bernardino counties saw drops in the 18 percent range.
San Diego’s price drop year-over-year was the lowest among the Southern California counties. Los Angeles’s home prices fell the most, at 7.2 percent.
Thoughts with Pat:
This update may came as a surprise to a lot of you. The news can sometimes confuse and mislead people into thinking that we as individuals are up, down, going to die etc. With so much happening in the US and World economic markets these days it only seems natural that housing prices would ride the same roller coaster ride. Take a deep breathe and look around you. Your still alive, your still working, don’t get caught up in the day to day retardness that the news and stat companies throw at you. Its all how you look at it. Don’t look at this down turn as a negative that the world is ending, instead look at it as an amazing time for you to get into a home that you could not have afforded 5 years ago. The San Diego and California Markets are in SALE mode!! My recommendation is go find your agent and get out there and look at whats on Sale right now, you are going to be surprised at what is now affordable to you.
BY JILL ESTERBROOK | PHOTOGRAPHS BY JOHN DURANT
LINDA AND PAT STOUFFER HAVE long had romantic notions about living in a grand old home in a well-established San Diego neighborhood. So it wasn’t exactly love at first sight when, in the summer of 2003, after months of searching from Kensington and North Park to the tip of Point Loma, they stumbled upon a ramshackle, two-story Craftsman-style home in Mission Hills. Overlooking the peeling gray paint, shabby wood shingles and sagging front porch, the Stouffers were attracted to the “good bones and strong character” hidden just beneath the drab surface of the century-old structure.
“We were really lucky that very little had been done by previous owners,” says Pat of the 2,300-square-foot bungalow. “It had been neglected but not butchered, and we felt confident it could be returned to its former glory.”
The pair enlisted Encinitas-based architect Samuel Chereskin, AIA, of Chereskin Architecture, to advise on the extensive restoration. They also tasked him with designing a 1,200-square-foot rear addition that would include a new kitchen and family room, expanded second-floor master-bedroom suite and a finished basement with laundry facilities and powder room. In addition, the Stouffers had applied for historic designation of their home, meaning the renovations would have to preserve the architecture of the front elevation, while the rear addition would have to reflect the home’s historic fabric.
“Linda and Pat have a large family and many friends they love to entertain,” Chereskin says. “The goal was to update the home to accommodate contemporary living, yet remain true to its historic style and classic Craftsman charm.”
The Stouffers didn’t just collaborate with Chereskin on the remodel, they took a hands-on approach. For more than two years, the couple lived in a small upstairs bedroom while methodically and meticulously reconstructing their home. Before beginning demolition and reconstruction, they toured historic homes and pored over “practically every magazine and book published on Craftsmans,” says Linda, a bank executive and watercolorist who selected the 20 different paint shades used throughout the home.
Pat took on the painstaking job of reproducing period details such as picture rails and corner guards. A former builder of new condos and apartments, he eased right into the project, yet he concedes remodeling an older home presented many modern-day challenges.
“Dealing with ancient pipes and wiring is tough,” he says, “but try matching intricate wood trim and leaded glass, replicating custom cabinetry and oversized window casements, or re-creating a boxed beamed ceiling.” The craftsmanship and carpentry skills Pat devoted to the project are testament to the couple’s passion for preservation.
“We wanted to preserve or put back what might have been in a gorgeous old home, like the built-in bookcases and inglenooks on each side of the fireplace,” Linda says.
The kitchen took top priority. Chereskin and the Stouffers shared the same goal for the dated space: Bring it into this century without losing its vintage feeling and charm. Rejecting today’s widespread affinity for granite, they opted for traditional subway tile for the backsplash and white hexagon ceramic tiles for countertops. Modern appliances and a palette of primary colors give the kitchen updated functionality and modern flavor.
Keeping in mind the Stouffers’ knack for entertaining, Chereskin didn’t enclose the kitchen. Instead, he added a raised eating bar that looks onto the family room. With Pat’s handiwork, they reproduced the boxed beam ceiling original to the front room. Elephant-leg tiered posts also help to seamlessly blend new spaces with the old.
“We showed considerable restraint by not overmodernizing with volume ceilings and other lavish appointments,” Chereskin says. The same could be said for both the first-floor expansion and the new master bedroom. In keeping with period style, the suite comprises a small sitting room, a balcony overlooking the backyard, a walk-in closet with built-ins and an old-fashioned laundry chute.
Wherever possible, the home’s original materials were rescued and reused. An oval window from the original front door now adorns the pullout door in the kitchen pantry, while an old swinging door now hangs between the dining room and new butler’s pantry.
Intent on finding just the right accents for their Craftsman home, the Stouffers spent weekends at Architectural Salvage in Little Italy. They hunted for crystal doorknobs, brushed-nickel hardware and ceiling-mounted light fixtures like the three “miraculously matching” orbs in the laundry room.
A trip to China last April brought a treasure trove of Asian furnishings and accents. The Stouffers, who designed the interiors on their own, found pieces apropos to the Arts & Crafts period—from the silkscreen above the mantel to the majestic rosewood table gracing the dining room to the cobalt-blue silk spread spilling luxuriously across the Mission-style bed in the master suite.
Four years after purchasing the home, the Stouffers are still adding final touches to their beloved Craftsman, which now proudly displays its historic-landmark designation. Pat recently installed a mail slot that had been lost from the original plan, and Linda is looking in catalogs and antique shops for that “perfect little basket” that will hang inside to catch letters and parcels.
Thoughts with Pat:
I have been out and about in a lot of these older neighborhoods recently. During my adventures I have noticed a lot of these renovations going on. People have started to realize that these amazing old home have great bones and they just need to be loved. Whats really nice about this movement is two fold: one, the neighborhood is benefiting as a whole not only by look but value and two, the upgraded home is providing a cleaner and more efficient environment for the owners. Im sure if we all had the means we would love to do this too but, until then we can all live vicariously through people like Linda and Pat Stouffer.
Thoughts with Pat:
Todays post was inspired by a movie I just watched called Inside Job. The movie is about the corruption of the world financial systems and predatory lending that led to the collapse and decline of the American Economy. It made me mad to think that good people just trying to by a home and make a better life for them selves were and are being preyed on by larger financial systems. If you are in the process of purchasing a home these are some signs of a bad mortgage. Hope this helps.
If your credit is damaged but you need cash, you might be tempted to accept a loan without worrying too much about the terms. But some conditions and clauses should make you reconsider your options.
Here are some loan conditions that should make you think twice:”There are some extremely abusive, one-sided contract terms consumers sign because they think that’s what they have to do to get the money,” says Jean Ann Fox, director of consumer protection for the Consumer Federation of America. But often you can find a better deal if you shop around.
1. Money upfront. ”Money upfront is a really bad sign,” says Fritz Elmendorf, vice president of communications for the Consumer Bankers Association, a financial services trade group. “Possibly even of fraud.” One nominal application fee is fine, he says. But the point of a loan is that they are supposed to be giving you money, not the other way around.
2. Changing interest rate. An adjustable-rate mortgage can be a good thing for some borrowers. But it should be a trade-off. In return for accepting a little uncertainty, the borrower gets favorable terms, like a lower rate. Too many times in the subprime market, borrowers are saddled with adjustable-rate mortgages simply as the cost of getting a loan, says Michael Stegman, professor of public policy and director of the Center for Community Capitalism at The University of North Carolina at Chapel Hill.
If you have a rate that can change, you have to ask some questions. “You want to know what is the worst-case scenario, not best,” says Norma Garcia, senior attorney with Consumers Union. “What’s the worst this can get? Will that be OK?”
Realize that a changing rate makes the loan a much riskier proposition for you. In a recent study of subprime mortgage refinance loans, ARM features boosted the chances of foreclosure by 49 percent, Stegman says.
3. Balloon payment. ”The ideal is: Don’t have any balloon payments,” says John Taylor, president and CEO of National Community Reinvestment Coalition, a trade association of community groups. The worst scenario: The balloon is due early in the loan. “It makes a huge amount of money due right away, and most people in the subprime market really can’t afford to do that. So for a lot of people, they end up losing everything.”
In subprime mortgage refinance loans, borrowers with a balloon payment have a 46 percent greater chance of foreclosure, says Stegman.
4. Too much money. More is not always better. So raise the red flag if a lender is trying to talk you into a larger loan. Two red flags if your home is the collateral. If you have to borrow, take the least amount for the shortest time period with the lowest APR.
5. Excessive fees. ”Some fees are truly legitimate,” says Garcia. “Some are backdoor fees that don’t appear in the disclosure.” What you want to watch out for is excessive or hidden fees. Add everything up yourself. The sum of the terms you shopped should equal what’s in the loan documents. If it doesn’t, you need to ask some questions.
6. Additional services you don’t want or need. Some loans are bundled with insurance policies to pick up payments or pay off the loan if you die or become disabled. Assuming you want the coverage (and can’t get it cheaper from your insurance company), the problem is that many times you pay for the entire policy upfront and it’s rolled into the loan with interest, Taylor says. So if you refinance that 30-year mortgage after five years, you’ll have paid for 25 years of insurance that you won’t use and can’t recoup. If you want the feature, look for a pay-as-you-go version.
7. A credit card that taps your home equity. You don’t want to squander home equity on a thousand little everyday purchases, says Garcia. “That’s a real scary prospect.”
8. High interest rate. The difference between prime and subprime rates will vary with the length and type of loan. With a mortgage, 5 percent to 6 percent above prime and “it’s time for the customer to look around and see if they can do better,” says Allen Fishbein, director of housing and credit policy for Consumer Federation of America.
Even if your credit is bad, shop around and be sure to include a credit union and a bank that makes both prime and subprime loans on your list.
9. No minimum loan term. Often with a payday loan, the entire loan (interest and principal) is due very quickly, says Fox. That means the borrower will be borrowing again just to keep pace with the debt, creating a never-ending cycle.
10. Requires a valuable asset as collateral. It may seem obvious that car-title lenders and pawn shops are a gamble because you risk losing the item if you can’t come up with cash you already don’t have. But consumers think nothing of putting their houses on the same block with a home equity loan or line of credit. “The worst arehome equity second mortgage loans, all of the loans that are secured by the roof over your head,” says Fox.
11. Binding mandatory arbitration clause. What is this? Before you sign for the loan, you forgo any rights to sue for any reason and instead agree to binding arbitration. The problem: Many consumer advocates believe that arbitrators’ decisions tend to favor the lenders and deny borrowers the right to due process.
Some of the big lenders are moving away from arbitration clauses, says Fishbein. But they’re still around in the subprime market.
“This should be freely entered into at the time of dispute, not as a condition for obtaining the loan,” he says. “By agreeing to this provision if a dispute should arise, the table is tilted toward the lender.”
12. Prepayment penalties. For the borrower, this fee “adds to the cost of credit,” says Fishbein. Reason: If your financial situation or credit improves, you can’t refinance your loan at a better rate. “It’s one of the features we find particularly bothersome in subprime loans,” says Fishbein.
Prepayment penalties also increase the odds of foreclosure, says Stegman. In his study of subprime refinance loans, consumers with prepayment penalties of less than three years had a 15 percent higher rate of foreclosure. With three years or more, the numbers went to 20 percent.Some credit experts advise avoiding prepayment penalties altogether. Others caution that one year is fine. Still others recommend keeping it to three years or less.
And make sure the loan doesn’t use the Rule of 78 to calculate interest. It’s an antiquated method and “a hidden prepayment penalty,” Fox says. What you want to see instead: the word “actuarial.” That means “you pay for credit for the actual length of time you use it,” she says.
13. Balance transfer fees. ”Depending on how much you’re transferring, it can be a lot of money,” says Garcia. “It’s something that’s really easy to overlook and can cost you hundreds of dollars.”
14. The lender solicited you for the loan. Face it, you get the best terms when you shop around and compare. If you’re just accepting what was offered, you probably could do better.
15. Teaser rates. Who are they teasing? The person whose name is on the bill. Read the fine print, and go with a lender who’s willing to give you a good rate and stick with it.
16. It comes with a free vacation. ”If it’s a product that’s that good, you don’t have to add something to make it attractive,” says Garcia.
17. High pressure tactics. Are you being urged to sign immediately? “Don’t do that,” says Garcia. Instead, have a third party look through the paperwork. Some possible candidates: an accountant, lawyer or someone at your local bank (if they aren’t making the loan). Or call a local credit counselor affiliated with the National Foundation for Credit Counseling or the Association of Independent Consumer Credit Counselors.
“If it’s good today, it will be good tomorrow,” says Garcia.
18. The lender is focused on your assets, not your income. Whether you’re pledging your car title or your home equity, if you’re a bad risk and the lender doesn’t care, that should set off the warning bells. “The biggest thing that would send me running: ‘no job, bad credit, bankruptcy — no problem because you have equity in your home,’” says Garcia. “If you don’t have income, you’re going to default, and you will be out of your home.”
19. A slew of “little” red flags. You may be able to negotiate a couple of unfavorable terms. But if the contract is loaded with them, you might just want to walk. A multitude of bad loan terms in combination could create a financial disaster.
The most dangerous triumvirate: an adjustable rate, prepayment penalties and balloon payments. “You really don’t want to have these combinations of terms,” says Stegman. Not only are you setting up a financial risk, but you’re also limiting your escape options.
20. Terms you don’t understand. Loans have gotten a lot more complicated. And with the addition of concepts like interest-only loans, adjustable rates and negative amortization, you might feel like you need an economics degree just to shop around. The truth is you might be better off with a more standard loan.
“Borrowers have to be asking a lot more questions than they were before,” says Fishbein. Especially tricky: What’s the payment, how often will that change and what’s the worst that it could get? And if increases are capped, does that mean the lender will add payments to the end of the loan?
“You need to do the math,” he says, “and ask a lot of questions.”
Homeowners worry about the value of their home, especially if they are planning on selling their house in the near future. You may be considering adding a second bedroom, or finishing the basement to improve your enjoyment of the house—or maybe you are considering improvements purely for the purpose of getting the most out of your home when it is time to sell.
Overall Cost vs. Benefit
According to Lending Tree, even if a home renovation project does increase the value of your home and fetch you a higher dollar amount when you sell it, you likely will not recover 100 percent of the cost of the project. Of course, some renovation projects, like a bathroom or a deck addition, fetch a higher return on the investment. Renovations can help move a house faster, helping you to save on paying the mortgage month after month when you put it up for sale.
Kitchens
The kitchen can either spark home buyers’ attention or leave them packing for other options. Quicken Loans says you can expect to see between an 80 percent and 93 percent return on your investment from renovating a kitchen. Update old appliances with more energy efficient models, resurface or replace the cabinets, install new counter tops and flooring, or add a breakfast nook to increase the appeal of your kitchen.
Bathrooms
Contractor website Handyman.com claims that bathroom renovations can fetch a rate of return on the investment of 102 percent on average. Many modern home buyers look for upgrades in the bathroom like a jetted tub or a heated floor, so they do not have to walk on cold tile when they step out of the tub or shower. Buyers will zero in on anything that looks like mold or mildew, including aging grout between tiles, or the caulking around the bathtub or sink. Also, if there is space in the house, consider installing another bathroom. Handy American says adding a bathroom in a house with one or one and a half bathrooms provides up to a 169 percent return on your investment.
Landscaping
One of the first things a potential home buyer will see is the outside of the home, and this includes the landscaping. In the age of the Internet, the picture of the front of your house may be the only chance you have to get a potential buyer interested enough to click on the link. Handy American claims that modest landscaping improvements can net an average 100 percent return on your investment, making it a good renovation project to put on your list. Eliminate weeds in the yard, cut back overgrown trees or shrubs, plant attractive flowers and maintain the lawn to appeal to home buyers.
Bad Investments
Some homeowners dive into home renovation projects that normally provide little to no return on their investment. Quicken Loans says that adding a swimming pool is one such bad investment. In general, make home renovations that appeal to a broad range of potential home buyers, avoiding anything that is taste specific or too extravagant for the area where the home is located. If you go overboard with improvements, they may actually drive away potential buyers.
replacing a front door can represent a 130 percent return on investment. Interior and exterior painting are often the best improvements you can make for your money. Landscaping can turn the worst property on the block to the neighborhood’s crown jewel overnight.